Regional Daily, Maybank KE (2014-09-24)

Daily 24 September 2014 TOP VIEWS Thai Market Compass Indonesia Construction | OVERWEIGHT Malaysia Strategy | NEUTRAL Philippines Banks | NEUTRAL Thai Market Compass Strategy Update SET could benefit from fund flows Potential stock market sell-off in Indonesia could benefit Thailand as a safe-haven destination in the short term. SET at 2xSD > LTM PER is expensive relative to its 15F growth outlook, +11% YoY. Despite lofty valuation we see limited downside as it is supported by domestic liquidity that has limited investment alternatives. At our 2015 EPS forecast, SET could be 1642, +3.6% from here. Foreign flows, though not likely to come in a big wave, could pick up slightly as foreign funds shift from Indonesia to other ASEAN countries. Our stock picks are BBL, BTS, CPN, DCC, INTUCH, TISCO, BGH, MINT, WHA and CK. Click here for report » Indonesia Construction Sector Update Temporary headwinds from fuel hike Temporary adverse impact of fuel-subsidy removal on share prices is imminent, but structural reform of higher allocation for infrastructure budget will be positive for sector. Earnings are likely to be well-shielded given high composition of multi-year projects, allowing cost escalation program. Maintain OVERWEIGHT on sector and Top Picks continue to be PTPP and ADHI as a laggard and long-term play. Click here for report » Malaysia Strategy Strategy update The Yen connection We continue to expect the USD/JPY to edge higher to 109 by end-2014, JPY/MYR to end 2014 at 2.99. TNB is the main beneficiary from its MYR3.4b Yen loans; auto players with Yen-denoted imports would also gain. No change in stock calls; TNB is one of our top big-cap BUYs. Click here for report » Philippines Banks Sector update BSP mulls new capital hike Minimum capital for banks may quadruple to PHP20b. Three commercial and 51 thrift banks, all unlisted, may be unable to comply right away. We believe this move makes for imminent further industry consolidation. Click here for report » COMPANY NOTES Tiga Pilar Sejahtera (AISA IJ) | Company Update Vicom Ltd (VCM SP) | Tiga Pilar Sejahtera (AISA IJ) Expect KKR to increase stake Share Price: IDR2,400 | Target Price: IDR3,000 (+25%) | MCap (USD): 586M | ADTV (USD): 0.9M Tiga Pilar announced a non-pre-emptive rights issue valued at USD54.9mn. It is likely that the new shares will be taken up by KKR, based on recent news reporting. We expect KKR to raise its stake in Tiga Pilar from 17% to 25%, becoming the second largest shareholder. The company�s net gearing is projected to fall to 49% in FY15F (vs. 85% in 1H14). Spin-off of agribusiness expected this year should be another positive catalyst. Click here for report » Vicom Ltd (VCM SP) Imminent inspection weakness Share Price: SGD6.03 | MCap (USD): 421M | ADTV (USD): 0.1M Resurgent new-car market to lower inspection volume, its core business. With weakening demand, near-peak 18x trailing 12-month (TTM) P/E appears rich. No rating or TP. Click here for report » ECONOMICS Singapore Economics Singapore CPI, Aug �14 Decelerate for the second month Inflation rate in Aug 2014 eased to +0.9% YoY (Jul 2014: +1.2% YoY), mainly on decline in car prices and housing costs. But core inflation rate (CPI ex-accommodation and private road transport) remained relatively stable ranging between +2.1% and +2.2% since May 2014 (Aug 14: +2.1% YoY; Jul 14: +2.2% YoY). We revised our 2014 CPI forecast to +1.7% versus +2.0% previously (YTD 2014: +1.5%; 2013: +2.5%) with domestic factors to remain as the main inflation driver. Click here for report »